(Ottawa) After disbursing tens of billions of dollars in emergency aid to workers and businesses during the COVID-19 pandemic, the Canada Revenue Agency (CRA) is moving into the phase of recovering benefits that should not have been paid.
Posted at 5:00 am
Joël-Denis Bellavance La Presse
And the total is staggering: $3.2 billion in the case of the Canada Emergency Response Benefit (CERB) and subsequent individual assistance programs (the Canada Emergency Student Benefit and Canada Economic Stimulus) implemented by the Trudeau administration according to information received from La Presse.
Since May, the CRA has issued warning notices to approximately 825,000 taxpayers who were not eligible for emergency benefits under eligibility requirements. In the case of the CERB, that program offered up to $500 a week to pay for eligible workers who lost their income or jobs because of the pandemic. In total, the CRA has made payments of US$83.4 billion to approximately 9 million Canadians.
During the pandemic, CRA administered 12 contingency programs set up by the federal government at lightning speed. The last payment under one of these programs was made by the CRA on November 13, the deadline for retrospective applications for the Business Rent Subsidy.
The review and collection work will extend into 2025, said Marc Lemieux, deputy commissioner of the Collection and Review Division at the CRA.
“The agency continues its audit efforts to ensure the integrity of benefit and grant programs. We do this work and recovery by putting people first. People who receive notices can call us to make arrangements if they are unable to pay back any benefits due in full. We will work with them on this,” said Mr Lemieux.
The amounts to be recovered are not fraud, but benefits paid to people who later turned out to be ineligible.
“A lot of people are affected. We understand that this has negative implications. It’s stressful. We are asking for a refund of an amount that can be substantial. But it is possible to make repayment arrangements that reflect each person’s means and ability to pay,” he added. He clarified that no interest or penalties will be imposed on the individuals concerned.
thousands of thefts
Mr. Lemieux also announced that the CRA has confirmed that at least 25,000 Canadians have been victims of identity theft by unscrupulous individuals in the last two years. “Nevertheless, we managed to contain it a lot. I can tell you that we examined more than 25,000 files to find 25,000 cases,” Mr Lemieux said.
“Like many companies, the agency was the target of scammers. We have blocked them and we continue to block them. We used leads we discovered internally or leads provided to us by partners such as police and banks. They gave us information about transactions that seemed suspicious. This allowed us to block compromised transactions,” he noted.
Mr Lemieux and former deputy commissioner of the Department for Valuation, Benefits and Services, Frank Vermaeten, gave an interview to La Presse on Monday to mark the end of the contingency programs and efforts that have begun to recover the amounts repayable to the tax authorities.
They explained the background to the implementation of these relief programs to support families, workers, students and businesses while the federal and provincial governments imposed strict containment measures to limit the loss of life during the pandemic.
When denial gives way to reality
Like many Canadians, Frank Vermaeten admits he was in denial at the start of the COVID-19 pandemic. The former senior CRA official hoped what he read about the crisis in the newspapers was a form of exaggeration.
“My biggest concern back then was my son’s ice hockey season! The playoffs were about to start. And it was so important to him. He was in the running for a scholarship,” he said in an interview with La Presse.
At the time, Mr. Vermaeten was the Deputy Officer of the CRA’s Assessment, Benefits and Services Division. But reality quickly caught up with him.
Mr Vermaeten, who is now Special Advisor to the Commissioner of the CRA, recalls as if it were yesterday the call he received from a Treasury Secretary on a Saturday in March 2020, after the Trudeau government decided to set up a facility set up the Canadian Emergency Response (CERB).
“The Ministry of Finance informed me that this program has to be set up in three weeks. Setting up a program of this magnitude is like creating a child benefit program from the ground up,” Vermaeten said.
Usually it takes 18 to 24 months. It had to be ready in three weeks! We get to work. And three weeks later, on April 6th, we launched the PCU.
Frank Vermaeten
In the early months of the pandemic, CRA employees literally worked day and night, seven days a week to carry out the mandates entrusted to them. Entire teams were reassigned to other duties, including audits, lending a helping hand to those who had to answer the many calls from Canadians with tons of questions.
The situation was urgent. The health crisis raged. The Canadian economy collapsed. Governments imposed unprecedented lockdowns hoping to stem the spread of the virus and prevent hospitals from being overwhelmed with critically ill patients.
On D-Day, the ARC received 31,000 requests in the first 10 minutes. A few days after launch, there were 3 million requests.
other program
“Three weeks after the launch of the CERB, I received another call from the Treasury asking me to administer another program, that of corporate wage subsidies. It had to be launched in four weeks,” he also explained.
Mr Vermaeten said it was imperative to make the application as simple and flexible as possible. Because the basic goal was to pay out the benefits as quickly as possible. In the case of private individuals, only an official certificate was required.
“Service Canada has already been overwhelmed by the growing number of employment insurance claims. It was therefore impossible for Service Canada to administer the emergency programs. It would have taken months to review claims and pay benefits. And millions of Canadians would have been excluded, like self-employed, contract workers,” he said.
These people would not have been able to meet their most basic needs, such as food, rent and electricity. There was no question that something radically different had to be set up to deal with an exceptional situation.
Frank Vermaeten
In an interview with La Presse, he echoed the metaphor of the plane being built in full flight, used by several elected officials, including Quebec Premier François Legault.
“We knew we were going to fly this plane and add parts to the plane mid-flight. We’ve added protections against fraud, cyberattacks, unauthorized banks and change of address,” he said.
“I’m not saying we were perfect, quite the opposite. We have learned a lot during the pandemic, especially on cyber attacks. There will always be people who will analyze everything afterwards and say we could have done this or that. But all I would say is that we did our best in an unprecedented situation,” he concluded.